AUSTIN, Texas -- The Texas Public Finance Authority yesterday named six underwriting teams to sell a record proposed $1 billion block of refundings by year's end.

But approval of the bonds, most of them double-A rated general obligation debt, came only after some board members questioned the agency's motives in naming 36 firms to negotiated teams.

"Are we trying to spread business around or are we trying to work on the best proposal?" said board member Peter Pincoffs. "I think it's very important that we take the most economical approach; I hope that's what we're doing."

He complained that proposed gross spreads were disregarded when some of the underwriting teams were named.

Chairman Marc Stanley said the board wanted to include as many Texas-based and minority-owned firms as possible, although Wall Street firms will still dominate.

"We all know they're spreading around business. That's what it's all about," said a Houston investment banker who was one of nearly 30 underwriters attending the morning meeting. "But that doesn't mean the state still won't get a good deal."

The board named Merrill Lynch & Co. as bookrunner and First Boston Corp. as co-senior manager on a $370 million GO refunding, the largest of the proposed issues. At the same time, Lehman Brothers was named bookrunner with co-senior managers Morgan Stanley & Co. and Paine Webber Inc. on a $280 million GO issue. Both are expected to sell the week of Sept. 28.

The Lehman Brothers deal is tentatively being designed as a RIB/SAVR, the firm's inverse floater product. That structure is expected to produce savings of up to 20 basis points over a standards GO refunding.

In an inverse floater deal, the issue is split into two equal variable-rate portions. The yield on each varies inversely based on the results of a monthly Dutch auction.

George T. Whisman, vice chairman of Masterson Moreland Sauer Whisman Inc. of Houston, the authority's financial adviser, said the two deals would be merged into one selling group if the smaller transaction were not going to produce those expected savings.

The third-largest issue is a $240 million to $250 million refunding of state-backed GOs sold two years ago as the first part of a $1 billion financing of the Texas Superconducting Super Collider project. Bookrunner Smith Barney, Harris Upham & Co. and co-seniors Goldman, Sachs & Co. and Dallas-based First Southwest Co. are expected to sell the offering in late October.

Texas-based Rauscher Pierce Refsnes Inc. was named bookrunner with co-senior manager George K. Baum & Co. on an estimated $65 million to $75 million floating revenue refunding. A tentative date for the sale has not yet been set.

The fifth sale, a $30 million to $35 million Texas Parks and Wildlife Department refunding, is expected by early December. The board named Bear, Stearns & Co. as bookrunner with co-senior manager Texas Commerce Bank of Houston.

The smallest issue, a $13 million refunding for the Texas State Technical College system, will be underwritten by Dallas-based Walton Johnson & Co., a minority-owned firm, with co-senior manager Texas Commerce Bank.

The transactions must now be approved by the Texas Bond Review Board, which next meets in September.

The six deals make up the largest-ever block of refundings. Traditionally, the state has brought refunding issues on a case-by-case basis, but officials said marked conditions may generate substantial savings on a large portion of Texas' outstanding debt.

The transactions are expected to produce average present-value savings of 3% to 5%, officials said.

"We're looking at savings of roughly $50 million overall," said Glen Hartman, executive director of the public finance authority.

He said many of the outstanding GO bonds have an average coupon of 7.3%, and if the refundings were priced today, the market is expected to be about 6.15%. "We expect our savings will be at least 100 basis points," he said.

In a related action, Mr. Stanley named a three-person subcommittee to consider criteria for the future hiring of underwriters and bond counsel. Among the goals would be the process to certify which firms are Texas-based and woman-and minority-owned firms.

Board member Harry Whittington suggested that the criteria include disclosure of state-level political contributions by firms seeking the authority's business.

"It might be a good step of ethics to consider that," said Mr. Whittington, who claimed that some brokerages have hired lobbyists to oppose such proposals. "It shows the public who we have or don't have connections to."

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